IBM Acquires Envizi to Enhance ESG Goals Monitoring – Report

International Business Machines (IBM) has acquired Envizi, an Australian analytics provider that specializes in automating emissions data collection. Bloomberg reports the acquisition will strengthen the tech giant’s artificial intelligence ambitions while helping companies make their operations more sustainable. IBM shares fell 1.60% to close at $132.87 on January 11

IBM is an information technology and consulting company that offers integrated solutions and services worldwide. IBM’s earnings report for Q4 2021 is scheduled for January 24, 2022.

Envizi Acquisition

The financial terms of the deal remain under wraps. The acquisition comes at a time when business leaders are pushing for the adoption of environmental, social, and governance (ESG) themes. Regulators, lenders, and asset managers are paying close watch to the company’s carbon footprint.

IBM acquiring Envizi does not come as a surprise. Last month the company’s Chief Executive Officer Arvind Krishna reiterated that future acquisitions would be in areas of automation, artificial intelligence, and hybrid cloud. In addition, the acquisition comes at a time when the framework for tracking emissions is on the rise.

Envizi has carved a niche for itself by making it easy for businesses to monitor their environmental, social, and governance goals. The company will integrate with IBM’s asset management and supply chain software following the acquisition. It Joins IBM with a clientele base that includes the likes of Microsoft (MSFT) and Uber Technologies (UBER).

Stock Rating

Yesterday, UBS analyst David Vogt downgraded IBM stock to a Sell from a Hold and cut the price target to $124 from $136, implying 6.68% downside potential to current levels. According to the analyst, the stock remains vulnerable to Q4 operating estimates and an elevated valuation as it continues to trade above its three and five-year averages.

Consensus among analysts is a Moderate Buy based on 5 Buys, 4 Holds, and 1 Sell. The average IBM price target of $153.79 implies 15.74% upside potential to current levels.